Cision PR Newswire

DICK'S Sporting Goods Reports Third Quarter Results; Raises Full Year Outlook

– Delivers Record Third Quarter Sales of $3.04 Billion, Up 2.8% Versus the Prior Year –
– Delivers EBT Margin of 8.8% and Double-Digit non-GAAP EBT Margin of 10.6% –

  • Delivered 1.7% growth in third quarter comparable store sales on top of a 6.5% increase in the third quarter of 2022
  • Reported earnings per diluted share of $2.39 and non-GAAP earnings per diluted share of $2.85 compared to $2.45, or $2.60 on a non-GAAP basis, during the prior year quarter
  • Raises 2023 comparable store sales outlook to a range of positive 0.5% to positive 2.0%, up from flat to positive 2.0% previously
  • Updates full year 2023 earnings per diluted share outlook to $11.45 to 12.05; Raises full year non-GAAP earnings per diluted share outlook to $12.00 to 12.60, up from $11.50 to 12.30 previously
  • Repurchased 3.5 million shares of common stock for $388 million during the third quarter

 

"Our strong Q3 comps demonstrate the impact of our strategies and our commitment to innovation. We are confident in the future of our business and believe our results demonstrate how we are successfully differentiating ourselves in the marketplace."


Ed Stack, Executive Chairman


"We are pleased with our third quarter results. With our best-in-class athlete experience and differentiated assortment, we had a very strong back-to-school season and continued to gain market share as consumers prioritize DICK'S Sporting Goods to meet their needs. Our Q3 comps were driven by increases in both transactions and average ticket, and we delivered double-digit EBT margin on a non-GAAP basis. As a result of our strong Q3 performance, we are raising our full year outlook, which balances the confidence we have in our key strategies with an acknowledgment of the uncertain macroeconomic environment. We're excited for the upcoming holiday season and the product, service and experience we are providing to our athletes."


Lauren Hobart, President and Chief Executive Officer

 

PITTSBURGH, Nov. 21, 2023 /PRNewswire/ -- DICK'S Sporting Goods, Inc. (NYSE: DKS), the largest U.S. based full-line omni-channel sporting goods retailer, today reported sales and earnings results for the third quarter ended October 28, 2023.

Third Quarter Operating Results

(dollars in millions, except per share data)

13 Weeks Ended

Change (1)

October 28,
2023

October 29,
2022

Net sales

$               3,042

$              2,959

$            84

2.8 %

Comparable store sales

1.7 %

6.5 %


Income before income taxes (% of net sales) (2)

8.8 %

10.3 %

(145) bps

Non-GAAP income before income taxes (% of net sales) (2) (3)

10.6 %

10.3 %

28 bps

Net income

$                  201

$                 228

$            (27)

(12) %

Non-GAAP net income (3)

$                  240

$                 228

$             11

5 %

Earnings per diluted share

$                 2.39

$                2.45

$         (0.06)

(2) %

Non-GAAP earnings per diluted share (3)

$                 2.85

$                2.60

$          0.25

10 %

 

Year-to-Date Operating Results

(dollars in millions, except per share data)

39 Weeks Ended

Change (1)

October 28,
2023

October 29,
2022

Net sales

$               9,108

$                8,771

$         337

3.8 %

Comparable store sales

2.3 %

(2.6) %


Income before income taxes (% of net sales) (2)

10.1 %

12.1 %

(199) bps

Non-GAAP income before income taxes (% of net sales) (2) (3)

10.7 %

12.1 %

(141) bps

Net income

$                  750

$                   808

$          (57)

(7) %

Non-GAAP net income (3)

$                  789

$                   808

$          (19)

(2) %

Earnings per diluted share

$                 8.63

$                  8.17

$        0.46

6 %

Non-GAAP earnings per diluted share (3)

$                 9.08

$                  9.11

$       (0.03)

— %

 

Balance Sheet

(in millions)

As of

October 28,
2023

As of

October 29,
2022

$

Change (1)

% Change
(1)

Cash and cash equivalents

$                1,406

$                1,438

$           (32)

(2) %

Inventories, net

$                3,283

$                3,361

$           (78)

(2) %

Total debt (4)

$                1,483

$                1,634

$         (151)

(9) %

 

Capital Allocation

(in millions)

39 Weeks Ended

$

Change (1)

% Change
(1)

October 28,
2023

October 29,
2022

Share repurchases (5)

$                 649

$                 361

$           288

80 %

Dividends paid (6)

$                 271

$                 124

$           147

119 %

Gross capital expenditures

$                 410

$                 274

$           135

49 %

Net capital expenditures (3)

$                 369

$                 238

$           131

55 %

 Principal paid in connection with exchange of Convertible
     Senior Notes  (7)

$                   —

$                 421

$          (421)


 

Notes



1.

Column may not recalculate due to rounding.

2.

Also referred to by management as earnings before income taxes margin ("EBT margin").

3.

In the fiscal 2022 period, there were no non-GAAP adjustments to reported EBT margin or net income. For additional information, see GAAP to non-GAAP reconciliations included in a table later in the release under the heading "GAAP to Non-GAAP Reconciliations."

4.

Fiscal 2022 included debt with a carrying value of $152 million related to the Company's Convertible Senior Notes, which were fully retired as of April 18, 2023. The Company had no outstanding borrowings under its revolving credit facility in 2023 and 2022.

5.

During the 39 weeks ended October 28, 2023, the Company repurchased 5.4 million shares of its common stock at an average price of $119.24 per share, for a total cost of $648.6 million under its share repurchase program. The Company has $780 million remaining under its authorization as of October 28, 2023.

6.

In the fiscal 2023 and fiscal 2022 periods, the Company declared and paid quarterly dividends of $1.00 per share and $0.4875 per share, respectively.

7.

During the first quarter of fiscal 2023, the Company retired the remaining $59.1 million of aggregate principal amount outstanding of the Convertible Senior Notes and related bond hedge and warrant transactions for 1.7 million shares of the Company's common stock. Refer to the Company's Form 8-K filed with the SEC on April 24, 2023 for additional information. During the 39 weeks ended October 29, 2022, the Company exchanged $421 million aggregate principal amount of Convertible Senior Notes and unwound the corresponding portion of the convertible bond hedge and warrants for $421 million of cash and 7.8 million shares of the Company's common stock. 

Quarterly Dividend

On November 20, 2023, the Company's Board of Directors authorized and declared a quarterly dividend in the amount of $1.00 per share on the Company's common stock and Class B common stock. The dividend is payable in cash on December 29, 2023 to stockholders of record at the close of business on December 15, 2023.

Business Optimization

As previously announced, the Company is conducting a business optimization to better align its talent, organizational design and spending in support of its most critical strategies while also streamlining its overall cost structure. During the third quarter of 2023, the Company incurred pre-tax business optimization charges of $52.5 million related to the elimination of certain positions primarily at its customer support center as well as the integration of its Moosejaw operations and other charges to optimize the cost structure of its outdoor specialty business. The Company currently anticipates additional pre-tax charges of approximately $10 million during the fourth quarter of 2023 related to its actions to optimize the outdoor specialty business and plans to continue its business optimization review, which it expects to complete during fiscal 2023.

Full Year 2023 Outlook (53 week year) 

The Company's Full Year Outlook for 2023 is presented below:

Metric

2023 Outlook

Earnings per diluted share

●       $11.45 to 12.05

○        Includes approximately $0.20 per diluted share for the 53rd week

○        Based on approximately 86 million diluted shares outstanding

○        Based on an effective tax rate of approximately 21%

●        $12.00 to 12.60 on a non-GAAP basis, which excludes approximately $62.5 million of business optimization charges

Comparable store sales

●        Positive 0.5% to positive 2.0% on a 52-week basis

Capital expenditures

●        $670 to 720 million on a gross basis

●        $550 to 600 million on a net basis

Store Count and Square Footage

The following tables summarize store activity for the periods indicated:


39 Weeks Ended October 28, 2023

39 Weeks Ended October 29, 2022

DICK'S
Sporting
Goods

Specialty
Concept Stores
(1)

Total (2)

DICK'S
Sporting
Goods

Specialty
Concept Stores
(1)

Total (2)

Beginning stores

728

125

853

730

131

861

Q1 New stores

1

1

Q2 New stores

1

1

1

1

2

Q3 New stores

1

9

10

3

6

9

Stores acquired (3)

12

12

Closed stores

4

3

7

2

3

5

Ending stores

725

(4)

 

144

869

732

136

868

Relocated stores

16

2

18

3

1

4









 

 Square Footage:

 (in millions)

DICK'S Sporting Goods
(1)

Specialty Concept
Stores (2)

Total (3) (6)

Q1 2022

38.7

3.6

42.3

Q2 2022

38.8

3.6

42.4

Q3 2022

38.8

3.9

42.7

Q4 2022

39.2

3.4

42.6

Q1 2023 (5)

39.2

3.4

42.6

Q2 2023

39.0

3.4

42.4

Q3 2023

39.2

3.6

42.7



(1)

Includes our Golf Galaxy, Public Lands, Going Going Gone! and other specialty concept stores. As of October 28, 2023, we operated 104 Golf Galaxy stores, 7 Public Lands stores, 17 Going Going Gone! stores, and other specialty concept stores. In some markets, we operate DICK'S Sporting Goods stores adjacent to our specialty concept stores on the same property with a pass-through for our athletes. We refer to this format as a "combo store" and include combo store openings within both the DICK'S Sporting Goods and specialty concept store reconciliations, as applicable. As of October 28, 2023, the Company operated 16 combo stores.

(2)

Excludes Warehouse Sale store locations that are temporary in nature, of which the Company operated 41 and 42 as of October 28, 2023 and October 29, 2022, respectively.

(3)

Represents Moosejaw store locations acquired by the Company during the first quarter of fiscal 2023, which average approximately 4,000 square feet per store. The Company plans to close ten of the previously acquired Moosejaw store locations by early 2024.

(4)

As of October 28, 2023, includes twelve DICK'S House of Sport stores, including two new openings during the third quarter of fiscal 2023, which were either converted or relocated from prior store locations.

(5)

Includes square footage from 13 Field & Stream store closures as of April 29, 2023, as we planned to convert them into DICK'S House of Sport stores, expanded DICK'S Sporting Goods stores, or other specialty concept stores.

(6)

Column may not recalculate due to rounding.

Non-GAAP Financial Measures

In addition to reporting the Company's financial results in accordance with generally accepted accounting principles ("GAAP"), the Company reports certain financial results that differ from what is reported under GAAP. These non-GAAP financial measures include non-GAAP EBT Margin, non-GAAP net income, non-GAAP earnings per diluted share, non-GAAP diluted shares outstanding, and net capital expenditures, which management believes provides investors with useful supplemental information to evaluate the Company's ongoing operations and to compare with past and future periods. Furthermore, management believes that adjustments related to the Convertible Senior Notes and convertible bond hedge provided a more complete view of the economics of the instruments upon conversion. Management also uses these non-GAAP measures internally for forecasting, budgeting, and measuring its operating performance. These measures should be viewed as supplementing, and not as an alternative or substitute for, the Company's financial results prepared in accordance with GAAP. The methods used by the Company to calculate its non-GAAP financial measures may differ significantly from methods used by other companies to compute similar measures. As a result, any non-GAAP financial measures presented herein may not be comparable to similar measures provided by other companies. A reconciliation of the Company's non-GAAP measures to the most directly comparable GAAP financial measures are provided below and on the Company's website at investors.DICKS.com.

Forward-Looking Statements Involving Known and Unknown Risks and Uncertainties

This release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified as those that may predict, forecast, indicate or imply future results or performance and by forward-looking words such as "believe", "anticipate", "expect", "estimate", "predict", "intend", "plan", "project", "goal", "will", "will be", "will continue", "will result", "could", "may", "might" or any variations of such words or other words with similar meanings. These statements are subject to risks and uncertainties and change based on various important factors, many of which may be beyond the Company's control. The Company's future performance and actual results may differ materially from those expressed or implied in such forward-looking statements. Forward-looking statements should not be relied upon by investors as a prediction of actual results. Forward-looking statements include statements regarding, among other things, the Company's future performance and growth opportunities, including our 2023 outlook for earnings, sales, and capital expenditures; the impact of our business optimization initiatives and the time frame in which we expect to implement our business optimization; share repurchases and dividends.

Factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statements include, but are not limited to: macroeconomic conditions, including inflationary pressures, geopolitical conflict, the expiration of student loan payment deferments, and elevated interest rates, and the effectiveness of measures to mitigate such impact on our business; changes in consumer discretionary spending; changes in consumer demand or shopping patterns and the ability to identify new trends and have the right trending products in stores and online; changes in the competitive market and competition amongst retailers, including competition for talent and the level of competitive promotional activity; investments in omni-channel growth or other business initiatives not producing the anticipated benefits within the expected time-frame or at all; additional unexpected costs and charges related to our business optimization, failure to achieve the anticipated cost-savings from our business optimization, and a disruption of the business optimization due to changes in the macroeconomic conditions or other risk factors described herein; organized retail crime and our ability to effectively manage inventory shrink; risks relating to vertical brands and new retail concepts; the size of strategic investments and the timing and success of those investments; inventory turnover and supply chain disruptions; weather-related disruptions and seasonality of the Company's business; changes in existing tax, labor, foreign trade and other laws and regulations, including those imposing new taxes, surcharges, and tariffs, and compliance with such laws and regulations; increasing labor and wage costs; limitations on the availability of attractive retail store sites; unauthorized disclosure of sensitive or confidential customer information; website downtime, disruptions or other problems with the eCommerce platform, including interruptions, delays or downtime caused by high volumes of users or transactions, deficiencies in design or implementation, or platform enhancements; disruptions or other problems with information systems; increasing direct competition from vendors (including shipping directly or through broadened distribution channels) and increasing product costs due to various reasons, including foreign trade issues, currency exchange rate fluctuations, and increasing prices for raw materials due to inflation; changes to the corporate tax rates; risks associated with brick and mortar retail store model, including the ability to optimize our store lease portfolio and our distribution and fulfillment network; litigation risks and our ability to protect our trademarks and other intellectual property; our ability to hire and retain quality teammates, including store managers and sales associates; negative reactions from customers, vendors and shareholders regarding Company policy changes and advocacy efforts related to social and political issues; the loss of key personnel; risks related to our indebtedness;  the issuance of dividends and our repurchase activity.

For additional information on these and other factors that could affect the Company's actual results, see the risk factors set forth in the Company's filings with the Securities and Exchange Commission ("SEC"), including the most recent Annual Report filed with the SEC on March 23, 2023 and our Quarterly Report filed with the SEC on August 23, 2023. The Company disclaims and does not undertake any obligation to update or revise any forward-looking statement in this press release, except as required by applicable law or regulation. Forward-looking statements included in this release are made as of the date of this release.

Conference Call Info 

The Company will host a conference call today at 10:00 a.m. Eastern Time to discuss the third quarter results. Investors will have the opportunity to listen to the earnings conference call over the internet through the Company's website located at investors.DICKS.com. To listen to the live call, please go to the website at least fifteen minutes early to register, download, and install any necessary audio software. For those who cannot listen to the live webcast, it will be archived on the Company's website for approximately twelve months.

About DICK'S Sporting Goods, Inc.

DICK'S Sporting Goods (NYSE: DKS) creates confidence and excitement by inspiring, supporting and personally equipping all athletes to achieve their dreams. Founded in 1948 and headquartered in Pittsburgh, the leading omnichannel retailer serves athletes and outdoor enthusiasts in more than 850 DICK'S Sporting Goods, Golf Galaxy, Public Lands, Moosejaw, Going Going Gone! and Warehouse Sale stores, online, and through the DICK'S mobile app. DICK'S also owns and operates DICK'S House of Sport and Golf Galaxy Performance Center, as well as GameChanger, a youth sports mobile app for scheduling, communications, live scorekeeping and video streaming.

Driven by its belief that sports have the power to change lives, DICK'S has been a longtime champion for youth sports and, together with its Foundation, has donated millions of dollars to support under-resourced teams and athletes through the Sports Matter program and other community-based initiatives. Additional information about DICK'S business, corporate giving, sustainability efforts and employment opportunities can be found on dicks.com, investors.dicks.com, sportsmatter.org, and dickssportinggoods.jobs, as well as Facebook, Twitter, Threads, and Instagram.

Contacts:
Investor Relations:
Nate Gilch, Senior Director of Investor Relations
DICK'S Sporting Goods, Inc.
investors@dcsg.com
(724) 273-3400

Media Relations:
(724) 273-5552 or press@dcsg.com

Category: Earnings

###

DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

(In thousands, except per share data)




13 Weeks Ended



October 28,
2023


% of

Sales


October 29,
2022


% of

Sales (1)










Net sales


$          3,042,405


100.00 %


$           2,958,861


100.00 %

Cost of goods sold, including occupancy and
     distribution costs


1,980,942


65.11


1,946,438


65.78










GROSS PROFIT


1,061,463


34.89


1,012,423


34.22










Selling, general and administrative expenses


776,037


25.51


679,747


22.97

Pre-opening expenses


12,482


0.41


7,212


0.24










INCOME FROM OPERATIONS


272,944


8.97


325,464


11.00










Interest expense


14,382


0.47


26,131


0.88

Other income


(10,084)


(0.33)


(4,826)


(0.16)










INCOME BEFORE INCOME TAXES


268,646


8.83


304,159


10.28










Provision for income taxes


67,540


2.22


75,703


2.56










NET INCOME


$               201,106


6.61 %


$               228,456


7.72 %










EARNINGS PER COMMON SHARE:









Basic


$                     2.46




$                     2.94



Diluted


$                     2.39




$                     2.45












NUMERATOR USED TO COMPUTE EARNINGS PER
     COMMON SHARE:









Basic


$               201,106




$               228,456



Diluted


$               201,106




$               236,928












WEIGHTED AVERAGE COMMON SHARES
     OUTSTANDING:









Basic


81,772




77,789



Diluted


84,291




96,681












(1) Column does not recalculate due to rounding

 

DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

(In thousands, except per share data)




39 Weeks Ended



October 28,
2023


% of

Sales (1)


October 29,
2022


% of

Sales (1)










Net sales


$           9,108,228


100.00 %


$           8,771,485


100.00 %

Cost of goods sold, including occupancy and
     distribution costs


5,908,672


64.87


5,652,966


64.45










GROSS PROFIT


3,199,556


35.13


3,118,519


35.55










Selling, general and administrative expenses


2,245,530


24.65


1,952,408


22.26

Pre-opening expenses


43,698


0.48


13,948


0.16










INCOME FROM OPERATIONS


910,328


9.99


1,152,163


13.14










Interest expense


43,809


0.48


77,267


0.88

Other (income) expense


(56,288)


(0.62)


11,559


0.13










INCOME BEFORE INCOME TAXES


922,807


10.13


1,063,337


12.12










Provision for income taxes


172,721


1.90


255,820


2.92










NET INCOME


$              750,086


8.24 %


$               807,517


9.21 %










EARNINGS PER COMMON SHARE:









Basic


$                    9.04




$                   10.55



Diluted


$                    8.63




$                     8.17












NUMERATOR USED TO COMPUTE EARNINGS PER
      COMMON SHARE:









Basic


$              750,086




$               807,517



Diluted


$              750,423




$               832,190












WEIGHTED AVERAGE COMMON SHARES
     OUTSTANDING:









Basic


82,995




76,527



Diluted


86,913




101,900





















(1) Column does not recalculate due to rounding

 

DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS - UNAUDITED

(In thousands)




October 28,
2023


October 29,
2022


January 28,
2023

ASSETS







CURRENT ASSETS:







Cash and cash equivalents


$             1,406,214


$             1,437,997


$             1,924,386

Accounts receivable, net


140,791


87,191


71,286

Income taxes receivable


9,118


4,082


8,187

Inventories, net


3,282,911


3,361,057


2,830,917

Prepaid expenses and other current assets


104,963


96,135


128,410

Total current assets


4,943,997


4,986,462


4,963,186








Property and equipment, net


1,569,703


1,342,786


1,312,988

Operating lease assets


2,243,025


2,025,149


2,138,366

Intangible assets, net


56,754


84,946


60,364

Goodwill


245,857


245,857


245,857

Deferred income taxes


30,817


58,945


41,189

Other assets


192,173


212,455


230,246

TOTAL ASSETS


$            9,282,326


$            8,956,600


$             8,992,196








LIABILITIES AND STOCKHOLDERS' EQUITY







CURRENT LIABILITIES:







Accounts payable


$            1,630,402


$            1,473,424


$             1,206,066

Accrued expenses


550,006


500,246


508,573

Operating lease liabilities


485,033


487,119


546,755

Income taxes payable


42,010


32,664


29,624

Deferred revenue and other liabilities


281,943


268,677


350,428

Total current liabilities


2,989,394


2,762,130


2,641,446

LONG-TERM LIABILITIES:







Revolving credit borrowings




 Senior Notes


1,483,026


1,482,110


1,482,336

 Convertible Senior Notes



152,006


58,271

Long-term operating lease liabilities


2,264,941


2,026,774


2,117,773

Other long-term liabilities


160,261


156,408


167,747

Total long-term liabilities


3,908,228


3,817,298


3,826,127

COMMITMENTS AND CONTINGENCIES







STOCKHOLDERS' EQUITY:







Common stock


568


570


585

Class B common stock


236


236


236

Additional paid-in capital


1,430,802


1,399,694


1,416,847

Retained earnings


5,374,573


4,682,663


4,878,404

Accumulated other comprehensive loss


(462)


(362)


(252)

Treasury stock, at cost


(4,421,013)


(3,705,629)


(3,771,197)

Total stockholders' equity


2,384,704


2,377,172


2,524,623

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY


$            9,282,326


$            8,956,600


$             8,992,196








 

DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

(In thousands)




39 Weeks Ended



October 28,
2023


October 29,
2022

CASH FLOWS FROM OPERATING ACTIVITIES:





Net income


$            750,086


$            807,517

Adjustments to reconcile net income to net cash provided by operating
activities:





Depreciation and amortization


271,368


250,522

Amortization of deferred financing fees and debt discount


1,786


3,558

Deferred income taxes


10,372


5,344

Stock-based compensation


39,552


37,579

Other, net


9,182


15,879

Changes in assets and liabilities:





Accounts receivable


(25,831)


(36,699)

Inventories


(415,291)


(1,063,448)

Prepaid expenses and other assets


(2,253)


(936)

Accounts payable


256,141


178,633

Accrued expenses


(21,473)


(94,177)

Income taxes payable / receivable


11,659


19,023

Construction allowances provided by landlords


40,624


36,100

Deferred revenue and other liabilities


(56,835)


(58,613)

Operating lease assets and liabilities


(104,373)


(64,663)

Net cash provided by operating activities


764,714


35,619

CASH FLOWS FROM INVESTING ACTIVITIES:





Capital expenditures


(409,527)


(274,307)

Proceeds from sale of other assets


27,500


14,261

Other investing activities


(51,298)


(32,885)

Net cash used in investing activities


(433,325)


(292,931)

CASH FLOWS FROM FINANCING ACTIVITIES:





Principal paid in connection with exchange of Convertible Senior Notes


(137)


(420,558)

Payments on finance lease obligations


(609)


(548)

Proceeds from exercise of stock options


13,924


19,953

Minimum tax withholding requirements


(97,956)


(43,227)

Cash paid for treasury stock


(648,554)


(392,882)

Cash dividends paid to stockholders


(270,596)


(123,823)

Increase in bank overdraft


154,577


13,469

Net cash used in financing activities


(849,351)


(947,616)

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS


(210)


(280)

NET DECREASE IN CASH AND CASH EQUIVALENTS


(518,172)


(1,205,208)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD


1,924,386


2,643,205

CASH AND CASH EQUIVALENTS, END OF PERIOD


$         1,406,214


$         1,437,997

 

DICK'S SPORTING GOODS, INC.

GAAP to NON-GAAP RECONCILIATIONS - UNAUDITED


Non-GAAP Net Income and Earnings Per Share Reconciliations

(dollars in thousands, except per share amounts)



13 Weeks Ended October 28, 2023








Gross profit

Selling, general
and
administrative
expenses

Income before
income taxes

Net income (2)

Earnings
per diluted
share

GAAP Basis

$         1,061,463

$            776,037

$             268,646

$        201,106

$              2.39

% of Net Sales

34.89 %

25.51 %

8.83 %

6.61 %


Business optimization charges (1)

6,323

(46,174)

52,497

38,848


Non-GAAP Basis

$         1,067,786

$            729,863

$             321,143

$        239,954

$              2.85

% of Net Sales

35.10 %

23.99 %

10.56 %

7.89 %




(1)

Includes $23.3 million of severance-related costs, $22.9 million of non-cash impairments of store and intangible assets and a $6.3 million write-down of inventory.

(2)

The provision for income taxes for non-GAAP adjustments was calculated at 26% which approximates the Company's blended tax rate.

 


39 Weeks Ended October 28, 2023








Gross profit

Selling, general
and
administrative
expenses

Income before
income taxes

Net income (2)

Earnings
per diluted
share

GAAP Basis

$        3,199,556

$        2,245,530

$            922,807

$       750,086

$             8.63

% of Net Sales

35.13 %

24.65 %

10.13 %

8.24 %


Business optimization charges (1)

6,323

(46,174)

52,497

38,848


Non-GAAP Basis

$        3,205,879

$        2,199,356

$            975,304

$       788,934

$             9.08

% of Net Sales

35.20 %

24.15 %

10.71 %

8.66 %




(1)

Includes $23.3 million of severance-related costs, $22.9 million of non-cash impairments of store and intangible assets and a $6.3 million write-down of inventory.

(2)

The provision for income taxes for non-GAAP adjustments was calculated at 26% which approximates the Company's blended tax rate.

 


13 Weeks Ended October 29, 2022








Net income

After tax
interest from
Convertible
Senior Notes (2)

Numerator used
to compute
earnings per
diluted share

Weighted
average
diluted
shares

Earnings per
diluted
share

GAAP Basis

$   228,456

$                8,472

$                236,928

96,681

$                2.45

% of Net Sales

7.72 %

0.29 %

8.01 %



Convertible Senior Notes (1)

(8,472)

(8,472)

(8,825)


Non-GAAP Basis

$   228,456

$                     —

$                228,456

87,856

$                2.60

% of Net Sales

7.72 %

— %

7.72 %





(1)

Adjustment eliminates the impact of assumed share settlement of the Convertible Senior Notes as required by "the if-converted method" under GAAP. The Company retired its Convertible Senior Notes without dilutive effect, due to cash payments for principal, shares received from its convertible bond hedge and shares repurchased to offset share settlement of remaining $59.1 million principal during the 13 weeks ended April 29, 2023. Accordingly, the Company believes reflecting the notes as debt more closely represents the economics of the transaction.

(2)

The provision for income taxes for non-GAAP adjustments was calculated at 26% which approximated the Company's blended tax rate.

 


39 Weeks Ended October 29, 2022








Net income

After tax
interest from
Convertible
Senior Notes (2)

Numerator used
to compute
earnings per
diluted share

Weighted
average
diluted
shares

Earnings per
diluted
share

GAAP Basis

$    807,517

$              24,673

$                   832,190

101,900

$                 8.17

% of Net Sales

9.21 %

0.28 %

9.49 %



Convertible Senior Notes (1)

(24,673)

(24,673)

(13,262)


Non-GAAP Basis

$    807,517

$                      —

$                   807,517

88,638

$                 9.11

% of Net Sales

9.21 %

— %

9.21 %





(1)

Adjustment eliminates the impact of assumed share settlement of the Convertible Senior Notes as required by "the if-converted method" under GAAP. The Company retired its Convertible Senior Notes without dilutive effect, due to cash payments for principal, shares received from its convertible bond hedge and shares repurchased to offset share settlement of remaining $59.1 million principal during the 13 weeks ended April 29, 2023. Accordingly, the Company believes reflecting the notes as debt more closely represents the economics of the transaction.

(2)

The provision for income taxes for non-GAAP adjustments was calculated at 26% which approximated the Company's blended tax rate.

 

Reconciliation of Gross Capital Expenditures to Net Capital Expenditures

(in thousands) 


The following table represents a reconciliation of the Company's gross capital expenditures to its capital expenditures, net of tenant allowances. 




39 Weeks Ended



October 28,
2023


October 29,
2022

Gross capital expenditures


$               (409,527)


$               (274,307)

Construction allowances provided by landlords


40,624


36,100

Net capital expenditures


$               (368,903)


$               (238,207)

 

Reconciliation of Non-GAAP Net Income and Earnings Per Diluted Share Guidance 

(dollars in millions, except per share amounts)










53 Weeks Ended February 3, 2024


Low End


High End


Income
before
income taxes

Net
income
(2)

Earnings per
diluted share


Income
before
income taxes

Net
income
(2)

Earnings per
diluted share

GAAP Basis

$            1,232

$          980

$                11.45


$            1,297

$       1,032

$                    12.05

% of Net Sales

9.7 %




10.0 %



Business optimization (1)

63

46



63

46


Non-GAAP Basis

$            1,295

$       1,026

$                12.00


$            1,360

$       1,078

$                    12.60

% of Net Sales

10.2 %




10.6 %





(1)

Adjustment eliminates the impact of charges incurred as part of our business optimization.

(2)

The provision for income taxes for non-GAAP adjustments was calculated at 26% which approximates the Company's blended tax rate.

 

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SOURCE DICK'S Sporting Goods, Inc.

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